Wall Street Journal

Revenue reached a record high of 60.8 billion, but Meta's stock plummeted after hours. What shocked the market was the massive "AI bill": capital expenditures soared, leading to a 91% drop in free cash flow, with negative territory imminent. Unlike Microsoft selling computing power, Meta's monetization through AI "mining" is too slow. When revenue growth can't keep up with the pace of spending, capital is losing patience with this seemingly bottomless heavy asset transformation.

Samsung Electronics' management sent strong bullish signals during a conference call: Agentic AI is igniting demand for computing power, and the shortage of storage supply is expected to continue until 2028. To this end, Samsung is signing five-year rolling long-term agreements (LTAs) with the world's top ten tech giants that include large upfront payments, aiming to secure 60%-70% of the company's total capacity to establish high visibility for its performance. Additionally, in the second half of the year, HBM4 revenue is expected to account for over 60%, and orders for 2nm foundry services are anticipated to double.

Federal Reserve Chairman Waller stated that the 2% inflation target has "no flexibility"; the Federal Reserve will not deviate from its responsibilities due to market or external pressures such as military conflicts or tariff adjustments. The surge in AI capital expenditures is driving up prices for memory and other items, and the timing and magnitude of supply-side impacts remain difficult to predict, increasing the complexity of monetary policy formulation; he downplayed forward guidance, urging the market to "follow the data rather than focus on the central bank."

The Federal Reserve is highly likely to remain unchanged tonight, but this may be the most unsettled "pause" in recent years. The money market indicates a 32% probability of a rate hike, and UBS economists bluntly state that the level of uncertainty is the highest in 20 years. Internal hawkish divisions are widening, with Waller's policy style becoming a mystery, and institutions like Citadel have clearly bet on external rate hikes. JPMorgan estimates that if rates are increased by 25 basis points, the S&P 500 could plummet by more than 2%—tonight, "no change" itself may also be a shock.

SK Hynix's operating profit in the second quarter surged 557% year-on-year to 60.5 trillion won, with revenue increasing 257% to 79.3 trillion won, both setting historical records, but both fell short of market expectations. Analysts believe the core reason for not meeting expectations is that the high exposure to HBM limited the benefits of rising prices for general memory, with the price increase of memory in the second quarter significantly slowing compared to the first quarter, and long-term agreements locking prices weakened flexibility.

On Monday during trading, SanDisk fell over 10%, with its market value evaporating by $170 billion in a month. SK Hynix's ADR once dropped 10%, and Micron fell over 7% at one point. Most institutions still believe that Micron, SK Hynix, and Samsung's leading advantages in the AI storage field are difficult to shake in the short term. Some analysts believe that the pullback in memory chip stocks provides new layout opportunities.

Wosh faces the strategic choice of lowering long-term interest rates through interest rate hikes. Although this week's interest rate hike is not a baseline scenario, market expectations are heating up. The historical "Greenspan dilemma" indicates that aggressive interest rate hikes can enhance credibility against inflation and compress long-term inflation premiums, thereby driving down mortgage rates, which aligns with the goals of the Trump administration. However, factors such as price moderation and internal reviews still pose short-term constraints.

The traffic volume in the Strait of Hormuz has dropped to one-tenth of pre-war levels, the CDS spreads of mega-scale tech companies have risen to a historical high, and the yield on 10-year U.S. Treasury bonds has risen to 4.66%—the three pillars of the bull market are under pressure simultaneously.

Goldman Sachs warns that global markets face a triple negative feedback loop: soaring oil prices combined with rising interest rates suppress the market, and delayed policies exacerbate risks; Google raises its 2026 capital expenditure to over $200 billion, with free cash flow turning negative, triggering a narrative crisis for super-large cloud vendors; AI infrastructure bond prices have significantly declined, and capacity expansion may evolve into excess computing power. The three loops reinforce each other, with reflexive signals being "extremely negative."

The world's largest pension fund, GPIF, manages $1.8 trillion in assets, and the Japanese government is pressuring it to repatriate a large portion of its overseas holdings. Once approximately $930 billion in overseas assets begins to flow back, U.S. Treasury yields will rise, the dollar will weaken, and risk assets will come under pressure. Currently, market pricing remains relatively calm, but key signals have quietly emerged. If the five-year dollar-yen cross-currency basis swap widens, liquidity in the U.S. stock market will tighten accordingly.